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TB Problem Qu. 2-272 Kluth Corporation has two manufacturing ... Kluth Corporation has two manufacturing...

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Accounting

TB Problem Qu. 2-272 Kluth Corporation has two manufacturing ...

Kluth Corporation has two manufacturing departments--Molding and Customizing. The company used the following data at the beginning of the year to calculate predetermined overhead rates:

Molding Customizing Total
Estimated total machine-hours (MHs) 7,000 3,800 10,800
Estimated total fixed manufacturing overhead cost $ 18,200 $ 7,600 $ 25,800
Estimated variable manufacturing overhead cost per MH $ 1.50 $ 5.00

During the most recent month, the company started and completed two jobs--Job C and Job M. There were no beginning inventories. Data concerning those two jobs follow:

Job C Job M
Direct materials $ 16,900 $ 10,300
Direct labor cost $ 23,600 $ 10,600
Molding machine-hours 1,250 5,750
Customizing machine-hours 3,300 500

Required:

Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. Further assume that the company uses a markup of 20% on manufacturing cost to establish selling prices. Calculate the selling prices for Job C and for Job M.

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